For the fourth quarter, American Express’s revenue, net of interest expense, rose 11%, to $15.8 billion, while net income jumped 23%, to $1.9 billion, according to an earnings news release.

Amex recorded $380 billion in billed business for the fourth quarter, a quarterly record. In one segment of billed business, Amex customers’ spending on goods and services grew just 5% for the quarter, compared to 10% growth in the year-earlier quarter, according to the earnings presentation. 

Customer spending growth on travel and entertainment, Amex’s other billed business segment, was even more sluggish by comparison: The fourth quarter’s 9% growth was a far cry from the 38% growth recorded for Q4 of 2022, as Amex’s customers were eager to book travel at that point of the COVID-19 pandemic. 

“Growth is normalizing as comparisons are becoming more difficult following the pandemic,” William Blair Analyst Cristopher Kennedy wrote in a Friday note to investor clients. 

Restaurant spending, the company’s largest category within travel and entertainment, reached $100 billion for 2023, Le Caillec said. Customer spending growth on airlines, however, slowed during the fourth quarter. Major airlines have noted softer demand, “and since many of those customers are using American Express cards to pay for the airline tickets, we saw a similar trend,” he said. 

“As we think about 2024, we are assuming a spend environment similar to what we’ve seen in the past few quarters,” Le Caillec said. 

Currently, much of Amex’s billings growth is coming from new card acquisition, “but there will be an organic step-up as the economy gets better,” which gives the company confidence in its long-term growth outlook, CEO Steve Squeri told analysts during the call. The company projected full-year revenue to grow between 9% and 11%.

For the full year, Amex’s revenue climbed 14%, to $60.5 billion, with net income rising 11%, to $8.4 billion.

By Caitlin Mullen on Jan 26, 2024
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